Apple says it’s paid out $320 billion to developers since 2008 as App Store fight heats up

Apple (AAPL) has paid App Store developers $320 billion since it launched the platform in 2008. That’s according to a note from the company’s VP of Services Eddy Cue, who offered a year-in-review of sorts for Apple’s Services business on Tuesday.

In a statement posted to Apple’s press site, Cue recapped the Services business’s performance throughout 2022, touching on everything from Oscar wins for “CODA” to the number of songs now available through Apple Music—100 million.

But it’s the $320 billion that stands out the most. That’s because Apple is staring down what could be a series of seismic changes for its App Store platform, including being forced to open up the iPhone to third-party app stores and payment options.

According to Bloomberg, Apple is preparing to cut a hole in its long-standing walled garden to comply with the European Union’s Digital Markets Act, which will require tech companies with 45 million or more users in the EU to open up their platforms to third- party app stores. The EU will begin enforcing the law in 2024. There’s no guarantee Apple would carry the rules over to the US, though.

For years, Apple has maintained that its App Store is the best way for its customers to safely and securely purchase apps for their iOS and iPad OS devices. But growing pushback from big-name developers, including Spotify, and calls for reforms by politicians have forced the company to make way for significant changes to its App Store practices.

Apple’s App Store is the only place consumers can download apps for their iPhones and iPads. The problem for developers is that if they want to sell something through the App Store, they also have to use Apple’s in-app payment system. But using that system means developers have to pay a 30% or 15% fee to Apple for each customer purchase.

Apple says its App Store has paid out $320 billion to developers since 2008. (Image: Apple)

Developers say that amounts to what they often refer to as an Apple tax on consumers. Without the App Store fees, developers say, they could offer their products and services for less.

Some countries have already moved to force Apple to change its practices. South Korea, for instance, requires Apple to let developers offer third-party payment methods for App Store apps. The EU’s Digital Markets Act goes a step further by requiring Apple to let consumers download apps from third-party app stores.

Lawmakers here in the US have been talking about passing legislation to force Apple, and its chief rival Alphabet’s Android, to offer third-party app stores and payment options, but nothing has come of those moves.

Letting the world know that it has paid out $320 billion to app developers could be Apple’s way of making it look better in the eyes of US politicians and regulators.

Apple’s Services is its second largest business segment by revenue behind the iPhone. In 2022, Services brought in $78.1 billion of Apple’s $394.3 billion in total revenue. The iPhone brought in $205.4 billion.

In addition to the $320 billion figure, Cue also pointed to the success of Apple’s various apps, including Apple TV+, Apple Music, Apple Arcade, and Apple Fitness+. According to Cue, Apple now has 900 million paid subscriptions across its various services.

If the App Store model is about to change, then it’s clear Apple still has plenty of options for raking in cash outside of App Store fees. That said, don’t expect the company to give up on trying to preserve the status quo at least here in the US anytime soon.

Sign up for Yahoo Finance’s Tech newsletter

More from Dan

Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

Click here for the latest technology business news, reviews, and useful articles on tech and gadgets

Read the latest financial and business news from Yahoo Finance

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: